ERC approves P5.5-B NGCP capex for 2017

The National Grid Corp. of the Philippines (NGCP) has been cleared by the Energy Regulatory Commission (ERC) to spend P5.5 billion for transmission projects this year.

This is a partial approval of NGCP’s application for capital expenditures (capex) from 2017 to 2020.

NGCP originally applied to spend a total P113.4 billion for the four-year period.

ERC chairman Jose Vicente Salazar said the commission needs to evaluate the application first as it sees no rush in approving the whole amount in one go.

“The commission needs to study further the propriety of the capex projects and their corresponding costs for the years 2018 up to 2020. There is no urgency to grant approval of those projects which can be done upon completion of the public hearings,” he said.

“We need to establish and ensure that the projects are indeed necessary so as not to unduly burden the consumers with exorbitant power rates,” Salazar said.

The ERC approval covers 58 projects, out of the 65 projects proposed by NGCP, which are found to be urgent and crucial to ensure continuous, efficient and reliable supply of electricity.

In its evaluation, the ERC found NGCP’s P113.4 billion proposed total capex cost included costs beyond 2020.

The power regulator said its provisional approval are subject to certain conditions.

It said the proposed projects shall be subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period.

NGCP is also directed to conduct competitive bidding for the purchase of major materials in the implementation of the proposed projects.

The grid operator is also ordered to pay in staggered basis the permit fee in the amount of P41.311 million for the 2017 projects.